The global transition to renewable energy must accelerate sharply over the next decade, with governments urged to prioritise electrification, grid upgrades and energy efficiency to keep climate ambitions within reach.
The International Renewable Energy Agency (IRENA), in its World Energy Transition Outlook 2026, warns that record growth in renewable power alone will not deliver the energy transformation needed to align the world with a pathway consistent with limiting global warming to 1.5°C.
Although renewable energy installations continued to reach record levels in 2025, grid infrastructure has struggled to keep pace, while global energy demand continues to rise and improvements in energy efficiency remain below the required rate.
IRENA argues that a genuine transition requires the progressive replacement of fossil-fuel-based energy systems, rather than simply adding renewable capacity to existing infrastructure.
The report calls for faster electrification, supported by renewable power, more efficient technologies and sustainable fuels, to reduce reliance on fossil fuels while meeting growing energy needs.
Under the agency’s proposed pathway, global installed renewable electricity capacity would need to rise from 5.2 terawatts currently to around 38.2 terawatts by 2050. Electricity’s share of final energy consumption would increase to 35 per cent by 2035 and more than 50 per cent by mid-century.
Solar and wind power would supply more than 80 per cent of global electricity by 2050.
However, IRENA warns that insufficient investment in electricity networks, energy storage and system flexibility could undermine progress, even as renewable generation expands.
Francesco La Camera, IRENA’s director-general, said the global energy transition was under pressure from rising demand, inadequate grid capacity and insufficient improvements in efficiency.
“Record growth in renewables is not enough on its own,” he said, arguing that countries needed to build an energy system that was electrified, efficient, flexible and powered by renewable sources.
La Camera added that electrification, grid infrastructure, storage and energy efficiency were central to the transformation, with their coordinated deployment essential to maintaining energy security, affordability and economic competitiveness.
Economic benefits and investment challenge
The report also highlights the potential economic benefits of accelerating the transition.
Under IRENA’s 1.5°C scenario, global economic growth could be 1.1 per cent higher annually than under a business-as-usual pathway, generating cumulative economic gains of around $46 trillion (£34.5 trillion) by 2050.
Renewable energy employment could increase more than fivefold over the same period, from just over 16 million jobs today, according to the report.
IRENA also suggests that greater competitiveness in electricity markets could help reduce end-user electricity prices by 15 per cent by 2050.
Realising these benefits, however, would require substantial investment. The agency estimates that cumulative annual investment needs would reach around $10.3 trillion between 2026 and 2050, with spending directed primarily towards renewable power, electricity grids, system flexibility and electrification across the wider economy.
La Camera said the transition needed to be managed in a way that ensured its economic and social benefits were widely shared.
“Affordability, social protection and fair access to economic opportunities must be built into implementation from the outset,” he said, stressing the importance of maintaining public support.
Seven priorities for governments
IRENA’s report sets out seven priorities for action over the coming decade, including integrated energy and market planning, national transition roadmaps, modernised electricity grids, stronger industrial and investment strategies, social and environmental policies, and deeper international cooperation.
The recommendations place responsibility on governments to coordinate the shift away from fossil fuels while safeguarding reliable energy supplies and keeping costs manageable for households and businesses.
For the UK and other economies seeking to cut emissions while maintaining industrial competitiveness, the report underscores the importance of expanding clean electricity alongside the infrastructure needed to deliver it.
IRENA argues that, if managed effectively, the transition can support economic development through improved competitiveness, greater resilience, better public health and long-term prosperity.